The Numbers: The breakdown provided by TREB is pretty interesting: 6,896 sales (7% fewer than October 2011); average price $503,479 (up 6.2% from October 2011). More specifically, the average price for a fully detached house was up 5%; the average price for a semi was up 7%; the average price for a condo was down 2%. (More on condos below.) The new-ish Home Price Index, which compares prices for similar houses over time, is up 5.1% from the same month last year. All in all, quite sustainable.
My Thoughts: Well, what to say about the Toronto housing market! I can’t tell you how many times I have written something like this: volume down, prices up. As has been the case for some years now, the market is limited by supply. Even in the face of trimmed demand (whether due to tighter mortgage regulations, the time of year, or because of endless ‘the-sky-is-falling’ nonsense from the media), there is still more demand in the Toronto market than there is supply. Thus, prices go up.
Interestingly, the average price of a condo has held up reasonably well over the last few months. The list below shows the average price for the given month, with a plus/minus number (percent change) relative to the same month last year:
June +2% $364,598
July -1% $347,996
August -4% $349,489
September +8% $377,422
October -2% $358,741
The variation in price month-to-month is a reflection of the intra-year variability in the market, which sometimes yields higher prices in the busier times of year (e.g. June and September), and probably also reflects the mix of sizes and types sold from one month to the next. By the way, the 905 has been more stable over the last few months, but with a much lower average sale price. If you want to buy a condo, we are probably getting into a good time to do that. If you own one that you were thinking of selling, but don’t have to sell, you might do better to hunker down for the next couple of quarters, or if you don’t live there, rent it out.
Houses are a totally different story than condos. That price appreciation is strong and steady. If you are a seller, there’s probably no need to fret – not through November, anyway. Once we get in to December the market will slow right down like it does every year. That said, there will be 3000-4000 sales in December, so it’s not like nothing happens. I usually make a sale in December, so if you do have to sell for some reason (e.g. you bought a great new place!), we’ll get it done.
If you want to sell in the New Year we’ll have to give January a few weeks to get a feel for what’s happening then. However, I think that we are in for a fresh round of economic recovery in the New Year. No matter who wins the US election today, the simple fact is that the nation and the markets will have some direction for the next few years. I spoke to a TD rep today who said that they are predicting a round of spending by American businesses (which have been sitting on about $2 trillion in savings). That will have a strongly positive impact on the Canadian economy, which may perhaps impact Canadian interest rates, etc. Any movement in our interest rates will likely spur a round of real estate buying as purchasers act to lock in record low interest rates. That would put more pressure on the market, and likely drive prices up again next year. Basically, more of same. 🙂